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When 'If and When' Becomes 'Here and Now'

BY Mary Cushing Doherty
April 29, 2010

Often, wrestling with stock options is an unwelcome complication in a divorce case. As discussed in last month's issue of The Matrimonial Strategist, many companies are dissolving or merging to survive. The recent merger of Wyeth and Pfizer illustrates some of the problems arising from these mergers and the resolution of these problems. Part One of this article addressed deferred compensation and performance share awards and provided sample forms dealing with these issues. The conclusion herein addresses options.

Restricted Stock Units and Stock Options

With all the different layers of Wyeth benefits and deferrals, addressing stock options was relatively easy; the form language for deferred distribution is fairly common. In addition, Wyeth employees had restricted stock units (another award of shares of Wyeth stock) based on future considerations outside their control. With reference to the Restricted Stock Units (RSUs) and stock options, the non-employee spouse had an interest those shares if and when they became available or exercisable. Since the shares ultimately would be taxable to the employee, the distribution addressed tax considerations. In the case of options, usually there would be a range of time over which shares could be exercised.

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